Anti-Poverty Group Launches Challenge Of Political-Activity Limits

A small Ottawa charity that's been under tax audit for almost five years has launched a constitutional challenge of a section of the Income Tax Act that restricts the political activities of charities.

Canada Without Poverty filed notice in a Toronto court late last month, arguing the Act violates Section 2 of the Charter of Rights and Freedoms, which guarantees freedom of expression and freedom of association.

"We are asking why this legislation remains in place," Leilani Farha, executive director of the group, said in an interview with CBC News.

"It clearly restricts free expression, which is contrary to the charter. We think the government has to justify this restriction."

The action, being argued pro bono by the law firm McCarthy Tetrault LLP, is the latest twist in a saga that began in early 2012 when the Conservative government launched an $8-million program to audit the political activities of select charities.

The first wave of audits hit environmental charities who opposed the government's energy and pipeline policies, and later expanded to ensnare human-rights, international-aid and religious groups. Funding for the CRA audits grew to more than $13 million, and 60 charities were eventually targeted.

Partisan activities, such as endorsing specific candidates or parties, are strictly forbidden for charities. But political activities, such as lobbying for reform of laws or policies, are permitted up to a 10 per cent ceiling.

The Trudeau government wound down the program in January this year, cancelling the program's last six scheduled audits, which had not yet begun. But Revenue Minister Diane Lebouthillier allowed 24 political-activity audits already in progress to continue – with any charity that is found to be too politically active threatened with losing its charitable status.

The Canada Revenue Agency began a financial audit of Canada Without Poverty in November 2011. But the agency raised the stakes a year later by expanding its audit to focus on the group's political activities, requiring the group to surrender thousands of files and emails.

Over maximum

And on Jan. 9, 2015, auditors delivered a devastating blow, claiming 98.5 per cent of the group's resources were devoted to political activities, well over the maximum 10 per cent allowed by law.

Canada Without Poverty, created in 1973, has lived under a cloud ever since, not knowing when its charitable registration might be yanked. Without registration, the group could no longer issue the charitable tax receipts that help sustain annual donations of about $318,000.

Some charities have challenged CRA's definitions of political activity as they fight audit findings. But with its charter case, Canada Without Poverty is challenging the law itself, says Farha.

"We don't consider ourselves to be at odds with the CRA in this litigation," she said. "We're not actually finding fault with CRA. We're finding fault with the legislation CRA is charged with enforcing."

Section 1 of the Charter of Rights refers to "reasonable limits" on rights such as freedom of expression and freedom of association that can "be demonstrably justified in a free and democratic society." The group argues the government must justify the 10 per cent limit imposed on charities under the Income Tax Act.

It also argues the law limits the charter guarantee of "freedom of association" by restricting how its members can collectively press politicians and others for changes to laws and policies to alleviate poverty.

"What we're talking about is preventing Canada Without Poverty from speaking the truth about the causes of poverty, and what needs to be changed," Farha said.

Among the political activities that CRA cited in its audit was a hosted dinner in 2010 where people living in poverty sat beside MPs to discuss changes in laws; an online course in human rights that might encourage people to press for changes in laws; and links on a website to newspaper articles recommending changes in laws.

No difference

To the argument that the group can simply give up its charitable status in order to speak freely, Farha responds that tax breaks provided to corporations or individuals are never contingent on limits to freedom of expression – and charities should be treated no differently.

The Trudeau government has said it will "modernize" charity policies, including "clarifying the rules governing 'political activity' with … a new legislative framework." A successful charter challenge, though, could force a more fundamental rewriting of tax law.

The charter challenge was filed Aug. 25 in the Ontario Superior Court of Justice in Toronto, where it will eventually be heard.

The Canada Revenue Agency temporarily suspended its political-activity audits during last year's election campaign, but resumed them after the Oct. 19 vote. As of June 29 this year, 16 such audits were still underway, and six groups had been served notice their charitable registrations would be revoked.

Late last week, spokesperson Lisa Damien said the confidentiality provisions of the Income Tax Act prevent the agency from discussing the affairs of any particular organization without the consent of an authorized representative. She also had no comment on the court action, saying the Attorney General of Canada had not yet been served with the claim.

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Harper's Legacy: Top Achievements, Failures, According To Poll

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The Angus Reid Institute polled 1,412 Canadians between Oct. 26 and 28, 2015 on the legacy of outgoing prime minister Stephen Harper. The poll had a margin of error of 2.6 per cent, 19 times out of 20.
Respondents were given a list of actions taken by Harper's government between 2006 and 2015, and asked to choose its biggest accomplishments and failures. A detailed list of actions can be found online.
Here are the results...

Harper's Notable Achievements
NOTE: The second-most popular choice was "none of these."

One in three — 36 per cent — chose this as the Harper government's top achievement.
(Harper stands in front of TVs displaying a 5% GST during a campaign stop in 2005).

Almost one-quarter — or 24 per cent — highlighted this action as a key achievement.
(Harper poses with then-finance minister Joe Oliver as he arrives to table the 2015 federal budget).

13 per cent chose this action as a notable achievement.
(Harper gives then-Assembly of First Nations chief Phil Fontaine a standing ovation as he responds to the official apology for residential school abuses in 2008).

12 per cent chose this action as a key achievement.
(Harper greets European Commission President Jose Manuel Barroso in 2013).

Nine (9) per cent chose this action as a key achievement.
(Harper drives an ATV across the tundra on Baffin Island, near York Sound, Nunavut).

UP NEXT: Harper's Notable Failures

27 per cent chose this action as the Harper government's most notable failure.
(A Canada goose stands on railway tracks as a plant operates in the background in Hamilton, Ont.)

26 per cent of respondents said this action was a failure.
(A protester in a Grim Reaper costume protests cuts to science policies during a 2012 rally on Parliament Hill).

20 per cent chose this action as a key failure.
(A protester demonstrates against C-51 at a March, 2015 rally in Montreal.)

16 per cent said the combat mission against ISIS was a failure, while 14 per cent said the same of the mission in Afghanistan.
(Harper and then-defence minister Peter MacKay look out from a bunker at an operating base in the district of Sperwan Ghar, Afghanistan in 2011.)

13 per cent chose this as a key failure.
(Harper holds up a pile of money during a 2015 campaign event).

UP NEXT: Defeated Tory Cabinet Ministers

Though Stephen Harper was re-elected in his Calgary riding in the 2015 federal election, many members of his cabinet went down in defeat.
Here are some key figures from Harper's inner circle who will not be returning to Ottawa...

Cabinet position: Minister of state for multiculturalism
Riding: Edmonton—Sherwood Park
First elected: 2008
Uppal also previously served as minister of state for democratic reform.

Cabinet position: Minister of state for science and technology
Riding: London West
First elected: 2008

Cabinet position: Chief government whip
Riding: Vancouver Island North
First elected: 2008 (though he also served as an MP from 1993 to 2006).
Duncan previously served as minister of aboriginal affairs.

UP NEXT: Defeated NDP incumbents

In the 2015 federal election, Thomas Mulcair's New Democrats fell from 95 seats to 44. And several high-profile incumbents from across the country were defeated, usually to Liberal candidates.
Here are a few key names that will not be returning to Ottawa...

First elected: 2006
Riding: Ottawa Centre
Shadow cabinet role: Foreign affairs
Dewar also ran for the leadership of the party in 2012.

First elected: 1997
Riding: Sackville—Eastern Shore (N.S.)
Shadow cabinet role: Veterans affairs
Stoffer was named Maclean's magazines Parliamentarian of the year in 2013 and frequently won the most congenial MP award.

First elected: 2008
Riding: St. John's East
Shadow cabinet role: National defence
Harris was also the longtime leader of the Newfoundland and Labrador New Democratic Party.

First elected: 2011 (though she served from 2004-2006 as a Liberal MP)
Riding: Gatineau
Shadow cabinet role: Justice

First elected: 2011
Riding: Halifax Atlantic
Shadow cabinet role: Fisheries, deputy employment insurance
Chisholm served as leader of the Nova Scotia New Democratic Party and ran for the federal leadership in 2012.